Saturday 26 May 2012
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25/11/2008 11:12:14
Farmers left to pick up the cost of dairy Crest mismanagement
The NFU has called price cuts announced by Dairy Crest for the price it pays for organic milk a ’huge mistake’ which will force farmers to pick up the costs.
Commenting on the news that Dairy Crest has cut the price it pays to its organic suppliers by 4ppl from December 1 NFU Dairy Board Chairman Gwyn Jones said: "It can only be described as a huge mistake at Dairy Crest for them to have to announce a price cut, and one of such magnitude, at a time when milk prices elsewhere are still rising. It shows an embarrassing lack of strategy within the company for which unfortunate farmers will have to deal with the consequences.
"Dairy Crest was warned earlier in the year that their recruitment of organic suppliers was too optimistic given the uncertain market, but they forged ahead with a huge lack of apparent foresight.
"This highlights once more the need for proper contracts. The NFU template contract advocates having a window for negotiation, which would prevent buyers imposing unilateral changes at their discretion and give farmers the option to leave and supply another buyer if they didn’t agree to a change of terms. Instead, in this situation, farmers are simply left to pick up the bill. I do think Dairy Crest has some serious explaining to do and some major issues of accountability to their farmer suppliers. In fact farmers want to know who precisely in the company is going to be held accountable for this? I implore them to look again at how they can improve this dire situation for their organic producers".
Commenting on the news that Dairy Crest has cut the price it pays to its organic suppliers by 4ppl from December 1 NFU Dairy Board Chairman Gwyn Jones said: "It can only be described as a huge mistake at Dairy Crest for them to have to announce a price cut, and one of such magnitude, at a time when milk prices elsewhere are still rising. It shows an embarrassing lack of strategy within the company for which unfortunate farmers will have to deal with the consequences.
"Dairy Crest was warned earlier in the year that their recruitment of organic suppliers was too optimistic given the uncertain market, but they forged ahead with a huge lack of apparent foresight.
"This highlights once more the need for proper contracts. The NFU template contract advocates having a window for negotiation, which would prevent buyers imposing unilateral changes at their discretion and give farmers the option to leave and supply another buyer if they didn’t agree to a change of terms. Instead, in this situation, farmers are simply left to pick up the bill. I do think Dairy Crest has some serious explaining to do and some major issues of accountability to their farmer suppliers. In fact farmers want to know who precisely in the company is going to be held accountable for this? I implore them to look again at how they can improve this dire situation for their organic producers".
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